Allianz Group will suffer because of software patents

October 4th, 2004

Dear Mr. Diekmann,

Have you ever considered offering general insurance for stock brokers
against the risk of losing money? As absurd as this sounds, the European
Commission is seriously considering equivalent measures at the moment.

The European Council and the European Commission seek to introduce
software patents in Europe. This is not only threatening any company
doing business in Europe, a
number of international scientists also see it as a grave risk to
European economies. Adding to the studies already known, recent
publications by Pricewaterhouse
Coopers (PwC) and Deutsche
Bank Research further underline the damaging
effect of software patents. As The
Register quotes PwC: "The mild regime [...] in the past has led to
a very innovative and competitive software industry
with low entry barriers. A software patent, which serves to protect
inventions of a non-technical nature, could kill the high innovation
rate."

Software patent applications could be considered like the chips that
are bet on a roulette table that -- if successful -- will win you the
jackpot in form of a multi-billion Euro litigation. Any large
corporation making use of software could find itself on the receiving
end of such a bet. The more money at play and the more software used,
the higher the chance of being targeted. Valuable companies such as
Allianz group -- which are in the main dependent on software revenues
are especially at risk of being adversely affected by the legalisation
of software patents in the EU.

While I believe the plans of the European Commission should already
have you quite worried, the current plans are going to affect you in
another aspect, as well.

Having to acknowledge the harmful and potentially devastating effect
of software patents on European companies and national economies, the
European Commission recently introduced the idea of another directive
aimed at creating a
compulsory insurance
against software patents for all European enterprises. This insurance
should obviously be cheap enough so that it does not immediately kill
the European economy altogether.

You, as CEO of Allianz Group will have to insure your enterprise,
because you are at risk of being the target of a multi-billion Euro
software patent litigation. This is essentially the same as asking for
cheap compulsory insurance of all stock brokers against losing money
-- and we are certain that you see the flaw in that logic.

We would appreciate the opportunity to discuss this problem with you
further, but now time is of the essence. The European Council is
planning to decide in November and the European Parliament will then
have to make a final decision early next year.